Demand Charge

A demand charge is a component of a commercial or industrial electricity bill based not on how much energy you consume, but on your single highest instantaneous power draw — your peak kilowatt (kW) demand — during the billing period. It is billed separately from the consumption charge, which covers total kilowatt-hours (kWh) used. Many residential customers never see a demand charge; for larger loads it can be a substantial line item.

Why miners feel it acutely

Bitcoin mining is an unusually unforgiving load for demand-charge billing. Because ASICs run at or near full power 24/7, a miner's peak demand is essentially its baseline — there is no quiet period to pull the monthly peak down. Demand charges can represent a meaningful share of the total bill, effectively adding cents per kWh on top of the base energy rate depending on the tariff. A site that ignores this can badly underestimate its true cost of power.

Managing it

Operators reduce demand charges through peak shaving — deliberately curtailing or staggering load during the utility's peak-setting windows — sometimes paired with on-site battery storage that discharges to cap the measured peak. The relevant tactic depends entirely on how the utility defines and measures the peak interval, so reading the tariff carefully is the first step.

Demand charges interact closely with how rates change by time of day — see time-of-use rate — and with a miner's ability to power down on cue, covered under curtailable load.